Shipping container rates from East Asia and China to the US West Coast have increased this week. This reversal in the downward trend, which saw rates drop by nearly 36% since July, is attributed to late-season holiday demand. Many importers had already shipped holiday goods early to avoid potential disruptions caused by the US East Coast dockworker strike, according to ICIS.
Increase In Spot Rate
Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said front-loading of volumes to the East Coast in September may have been stronger than to the West Coast due to the rush to beat the 1 October strike deadline.
Supply chain advisors Drewry has Shanghai-USWC rates edging higher by less than 1% and said of the increase in spot rates ex-China that it expects this trend to continue as the Christmas rush intensifies.
Levine said the stronger front loading of volumes to the East Coast could explain the sharper drop of East Coast rates over the last few weeks, as well as the anomaly that saw East Coast rates fall below West Coast rates.
Rates to the East Coast are typically about $1,000/FEU (40-foot equivalent units) higher than to the West Coast.
Drewry still has East Coast rates about $400/FEU higher than West Coast rates. Levine noted that rates to both coasts are still $1,000-1,500/FEU above their April lows.
East Coast Update
Union dock workers and US East Coast port operators will resume negotiations on a new master agreement in November, according to a joint statement from both parties.
The International Longshoremen’s Association (ILA), representing the dock workers, and the United States Maritime Alliance (USMX), which represents the ports, reached a tentative agreement on 3 October that ended a three-day strike.
The strike was paused until 15 January after parties agreed on the salary portion of the agreement, essentially meeting in the middle.
Liquid Chem Tanker Rates Stable
US chemical tanker freight rates were largely unchanged this week for most trade lanes, while vessel demand continues to be soft for various routes.
The USG to ARA remains soft and solid for contractual cargoes and any additional available CPP tonnage could continue to pressure the market even further.
Similarly, that situation exists for volumes on the USG to the Caribbean and South America trade lanes.
From the USG to these regions, space among regular carriers remains available, due to a lack of interest.
However, for the USG to Asia spot volumes continues to be weak as there seems to be plenty of prompt space available. Mainly parcels of methanol to China seems to have provided any support to the weak market.
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Source: ICIS
